Outsourcing a way out of Nigeria’s unemployment challenge

Unemployment Rate in Nigeria increased to 18.80 percent in the third quarter of 2017 from 16.20 percent in the second quarter of 2017. In Nigeria, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. In absolute numbers, the number of people who were unemployed had increased to an estimated 15.9 million, while the underemployed were at about 18 million (21.2%). Combined, 40% of the country’s labour force are therefore either underemployed or have no job. The alarming truth is that if we do not look for a way of reducing this numbers then the country will have a lot of issues ranging from higher increase in health issues to crime and violence that are a direct relation with unemployment in the nearest future.

However, in analysing the distribution of Gross Domestic Product (GDP) across economic sectors in Nigeria it shows that there could be hope for Nigeria in her service sector of which Outsourcing can be looked at as a viable solution to improving the Nigerian employment rate.

Statistics show the distribution of the gross domestic product (GDP) across economic sectors in Nigeria from 2007 to 2017. In 2017, agriculture contributed around 20.85 percent to the GDP of Nigeria, 22.32 percent came from the industry and 55.8 percent from the services sector.

According to a report titled “Structural transformation and jobless growth in Nigeria” by PwC it notes that while Nigeria has recorded considerable growth in major sectors, such as agriculture and manufacturing, employment generation by these sectors has been poor. The services sector, which has the highest employment elasticity according to PwC’s analysis, can deliver high productivity jobs with great potential for income generation and poverty reduction.

Outsourcing service industry has been discovered as the fastest way to create jobs in the world, especially where unemployment is the problem. In India alone, this industry generated over 20million jobs in just few years. However, in Nigeria it could also generate 500,000 jobs within a very short time if fully embraced by all according to expert reports.

The impact of outsourcing in Nigeria cannot be over emphasized, most of the outsourcing companies in Nigeria has grown exponentially in terms of personnel base. Mr. Onu, who is the CEO of an Abuja based IT/outsourcing company, Interranetworks, said his company which was set up just less than 4 years ago, already had a staff strength of over 200. C&I Outsourcing a leading human resource and training firm has also over the years given opportunity for employment to over 5000 employees. This are just a few of many outsourcing service organisations that have been providing job opportunities in the Nigerian service sector.

Outsourcing has also raised concerns over the protection of outsourced workers, who by law are supposed to be entitled to all the rights guaranteed by national law and international best practices. However, the following are possible way forward that can be adopted by government and all stakeholders. The Nigeria national assembly should enact employment legislation law that will serve as a protection for rights of employees against any form of maltreatment within their organization. The law should be also compelled foreign companies that desire to operate in Nigeria not to violate the labour practice which can’t be allowed in their various home countries. Equally, the international best practices should be part of Nigeria labour sector. There is need for government to also move into action by ensuring that the local content laws are being enforced across all the sectors of the economy in that Nigerian workers are not easily displaced by expatriates that are most not qualified or better skilled.

This concern should be addressed by all stake holders, so the Outsourcing service sector can be better embraced as a viable means of employment in Nigeria.